Tagged: wages

The day after the election I said “I’d be extremely surprised if it doesn’t turn out to be National-NZ First.” Well, I have the pleasure (I think?) of being able to say again: I was wrong.

I’m not entirely sure how I feel yet.(I guess I’m happy? We’ll have to wait and see the content of the agreement and what the govt actually does. I hope the Greens demanded a lot and got it (this looks promising but we don’t have details or confirmation yet), and that Winston emphasised the 1/3 of him that’s like Sanders rather than the 2/3 of him that’s like Trump. There is real hope of climate action, more paid parental leave, faster minimum wage increases, reversal of the step-backwards pay equity law, adequate funding for health especially mental health, more support for students and some free education, repeal of national standards and charter schools, more affordable housing even if limited crackdown on speculation, adequately funding a full superannuation system in the future with the taxes future retirees are paying now, less poverty in families where adults are in paid work, and maybe even some benefit rises/humanisation.)

So instead of reactions or analysis I thought I’d do what I do best and make a couple of graphs.

Here’s the first one. It compares the votes received by the parties that ended up making up the government with the votes received by other parties who (a) managed to make it into Government and (b) plausibly might have banded together to form a government.1

The takeaway from this is:

The 2017 government represents a majority of votes as well as a majority of seats. Under FPP, the government hadn’t represented the majority of votes since 1951. And even under MMP, governments don’t represent a majority of party votes every time (five times out of eight so far).

The alternative bloc (National & NZ First) would have been an even bigger majority: it got 1.29% more party votes than the bloc that formed the government. But this isn’t new. In 1996, the alternative bloc (Labour & NZ First & Alliance) got 4.42% more party votes than the bloc that formed the government. Both times NZ First chose what they thought was the best government bloc, not the biggest government bloc.

As I argued in my last blog, MMP creates monarch-maker situations more often than FPP because it more accurately reflects how people vote. As Winston pointed out in his reveal speech, neither National nor the Labour-Green MOU succeeded in winning a majority and king/queenmaking themselves. This left NZF able to make up a majority with either side. A lot of people don’t like kingmakers—especially when they’re people we don’t like, and especially when they don’t choose how we’d like. And I get it. But First Past the Post was worse. It artificially advantaged major parties and leads to disproportionate situations like 1978, 1981, 1984, and 1993 where the opposition bloc won more votes (often substantially more votes) than the government bloc but didn’t get the all-important majority of seats.

Here’s the second graph:

The takeaway from this one is pretty obvious.

Footnotes

This means I’ve excluded other parties who might have liked to be part of a government bloc but they didn’t make it into Parliament (TOP, Conservatives, Christian Coalition, Legalise Cannabis, Values, sometimes Social Credit, sometimes NZ First, etc.). I’ve also excluded parties where it’s not plausible that they might have worked together: e.g. ACT with National and NZ First this time (they wouldn’t have been needed or wanted). I dunno if it’s plausible that Social Credit might have gone with Labour in 1978 and 1981 and National in 1984 because I don’t really know anything about Social Credit, but I’ve erred on the side of “who knows—maybe”. If we removed Social Credit from the numbers, the opposition blocs would be reduced. But still, in ’78 and ’81, Labour won the popular vote but National won a majority of seats.↑

“National and the Greens should work together” sentiment seems to have reached an all-time high. This is not because the two parties have moved closer together in policy or philosophy. It’s because after the election, this is the only way—short of a Nat-Lab grand coalition—to lock Winston Peters out of any role in government.1

I can’t be bothered to list examples because I’m sure you’ve all seen or heard people calling for a blue-green government arrangement (or “teal deal” if you will). Perhaps you’ve even suggested it yourself.2

What I want to talk about is the suggestion that usually comes after “National and the Greens should work together”. This is how former National PM Jim Bolger puts it:

“the Greens might be quietly reflecting on whether they, unique in the world of Green parties, should only link themselves to left-wing politics, whereas the environment is neither left wing or right wing, frankly. The environment is the environment; it’s Mother Earth we’re talking about.”

The idea is that the Greens would be more effective in pushing environmental policy if they stuck to that, and got rid of their insistence on left-wing socio-economic policy. This way, it is suggested, they would have a better chance of being able to find room for compromise and cooperation with National. Other Green parties in countries like Germany have been willing to form coalition governments with right-wing parties.

The Greens’ usual response is to give reasons why environmental justice and socio-economic justice (or environmental sustainability and socio-economic sustainability) are inextricably linked. Ever since they were the Values Party they’ve pushed both, and they don’t intend to stop now.

Another response could be to say that New Zealand is not Germany. Germany has a democratic socialist party called The Left which pushes left-wing policy even if the centre-left parties (the Greens and the SDP) don’t—even if they form grand coalitions with the centre-right. In New Zealand, the Alliance and Mana have disappeared as left voices in Parliament. Moreover, Labour kickstarted neo-liberalism and haven’t really repented from it. Until Labour make a significant change from Clark/Blair-esque compromise to Corbyn-esque social democracy, the Greens are the only party significantly trying to push New Zealand in a leftward direction.

However, both of these responses to the challenge accept the terms of the challenge (like Labour accepted the terms of National’s “dead cat” “fiscal hole” challenge). These responses accept the assumption that it’s the Greens’ left-wing socio-economic stance that blocks them from working with National, and that they’d be able to find common ground on the environment.

However, I don’t think this is correct. Certainly the Greens’ socio-economic stances—making welfare more of a livable UBI and less of a punitive control mechanism; raising tax on the rich and introducing it for property investors; returning the minimum wage to 2/3 of the average wage; reducing imprisonment—are all basically the opposite of what the Key-English government have done. However, I think Bill English is actually more likely to accept these policies than to accept Greens’ environmental policies. If Bill could be convinced these socio-economic policies are good “social investment”, he could get behind them. Of course, he won’t. (This is largely because National’s vision of “social investment” is so limited by a pathologically individualist mindset, and so tantamount to Minority Report in its instinct to control the risk factors rather than healing the determinants.) But it’s not outside the realms of possibility.

The Greens’ environmental policies, on the other hand, would require National to actually seriously challenge farm owners, drilling/mining companies, and other capitalists. Currently the costs of these capitalists’ activities are largely falling on the environment, and therefore on the present and future public. The Greens want to stop these business activities destroying our shared home by preventing and internalising these external costs. They’ll ban some unjustifiably polluting business activities, such as drilling or mining or exploring for more fossil fuels at a time when even burning the fossil fuels already dug up will make the Paris target impossible. They’ll tax other business activities for their pollution—making those who produce the costs pay the costs, instead of externalising them. And they’ll use the tax revenue to clean up the damage and to subsidise farmers and other businesses moving to more sustainable ways of doing business.

National would refuse this offer. And then maybe people would stop trying to make the teal deal happen. Or at least realise it’s not Green stubbornness stopping it happening. It’s National’s near-total lack of concern for the environment.

Footnotes

Special votes are extremely unlikely to change the basic possibilities.↑

These points I’m making are not new—here‘s basically the same point made three years ago on the No Right Turn blog.↑

It was shrewd of National to portray criticism of National’s record on rivers as criticism of farmers who are working hard to clean up rivers, because it’s deeply ingrained in the NZ psyche to pretend we’re really farmers at heart. We all lie about being the rural type.↑

Another obvious lie too many National supporters believe is that Labour are bad for employment (because they raise the minimum wage too fast), and National have “solved unemployment” (because they’ve made it harder to maintain benefits):

Now, it is true that Labour raise the minimum wage much faster, and that National cut welfare (in a recession!). But the unemployment rates have been more like the other way around,* and anyone suggesting National are better than Labour at keeping unemployment down is either believing or promoting a lie.

Actually, it’s a couple of lies… but they’re both obviously bollocks to anyone who’s spent five minutes looking into them:

LIE 1:

“Raisng the minimum wage reduces jobs”

TRUTH 1:

If, as Key claims, Treasury has done research that shows major job losses would result from gradual increases in the minimum wage, then this amazing information would be world news – because the vast weight of academic research around the world ever since the groundbreaking David Card/Alan Krueger work in the US fast food industry 20 years ago, is that it would do no such thing.

LIE 2:

“National have solved unemployment by making it harder to get the benefit”

This confusion arises from a basic failure to understand the difference between individual problems/solutions and socio-economic problems/solutions, as sociologist C. Wright Mills pointed out 55 years ago:

John Key is being a Spurious George again. In explaining why he’d love to cut taxes for (mostly) the rich, but just can’t afford to yet…

Key pointedly said that when National took office the average wage was $47,000 a year but had risen to around $55,000 today, and was expected to climb to $62,000 by 2017. This was creeping towards the top tax bracket, where salary earners pay 33c in the dollar for earnings over $70,000.

“I don’t think it was anyone’s intention that someone on the average wage would be paying the highest marginal tax rate in New Zealand,” he said, echoing arguments National has been making in private for months.

Well, Mr. Key, it also wasn’t anyone’s intention for the incomes of the rich to rise so much faster than those of the poor, pushing up the average (mean) income to a level less than 30% of people reach. (Actually it was some people’s intention: right-wingers who think inequality is a good thing)

Key is trying to give the impression that the average (mean) income is the income earned by the person in the middle. But mean doesn’t measure the middle of the people, but the middle of the money; and of course the money is weighted towards wealthy outliers at Mr. Key’s end of the spectrum, who push the average up with their exponentially higher incomes.

A far more useful statistic is the median income: the amount that half the people earn more than, and the other half earn less than. This truly represents the average Kiwi. The median individual income is almost exactly $30,000 p.a. – just under the middle of the third-to-top tax rate band.

It’s actually getting more and more misleading to portray average income as a reflection of middle-income earners: As inequality worsens, the “middle of the money” (average income) is moving further and further from the “middle of the people” (median income). My eye makes it less than 10% difference in 1980, up to about 25% now:

Another problem with mean income figures is they hide inequalities like these and portray a boon for the rich as a boon for everyone.

I do agree in principle with indexing tax-rate thresholds (in fact, all thresholds… *cough*student loan repayments*cough*) for inflation, but Key’s trying to use that principle as a smokescreen for more tax cuts to the rich, spinning this as a release for the average NZer from crippling over-taxation, which is not true on any level whatsoever. Taxpayers between the median and mean incomes actually pay the lowest proportional tax:

In any case, if Key is really worried about too many NZers in the top tax bracket, there’s an obvious solution: Implement a new top tax rate(s) for the super-rich, like most similar countries have:

Soooooooooo: whatever people’s intention about who should be on the top tax rate, it’s clear John Key’s intention in referring to the mean income, rather than the median, is to mislead (or perhaps he simplify misunderstood statistics in a conveniently misleading way, as with child poverty at the last debate). Sadly he’ll probably largely achieve that intention.

“Whatever the number was for an individual or a household, whether it’s $500, $1000, $1500 – you can pick your poison – I don’t accept the argument that doesn’t matter to a low- to middle-income family. I think it does matter.”

After an eleventh-hour resurrection of Cut Your Hair just before the 2017 NZ election, the blog has re-overtaken its old rivals Put ’em all on an island, Keeping Stock and, the ultimate nemesis, Room 5 @ Melville Intermediate School.

(However, these rankings should be taken with a large grain of salt because not every blog is included, the stats are very fakeable, and each counter gives different stats, as you’ll see below)